Exhibit 10.58
AMENDMENT NO. 1 AND WAIVER TO AMENDED AND RESTATED
LOAN AND SECURITY AGREEMENT
This Amendment No. 1 and Waiver (this "Amendment") is entered into as
of December 30, 1996 by and among MK Rail Corporation, a Delaware corporation
("MKR"), with its chief executive office at 1200 Reedsdale Street, Pittsburgh,
Pennsylvania 15233; Motor Coils Manufacturing Co., a Pennsylvania corporation
("Motor Coils"); MK Engine Systems Company, Inc., a New York Corporation
("MKES"); Clark Industries, Inc., an Illinois corporation ("Clark"); Power Parts
Company, a Nevada corporation ("Power Parts"); Touchstone, Inc., a Tennessee
corporation ("Touchstone"); Power Parts Sign Co., an Illinois corporation
("Sign") (each of MKR and the Component Subsidiaries a "Borrower" and
collectively the "Borrowers"), and BankAmerica Business Credit, Inc., a Delaware
corporation, individually as a lender ("Lender") and as agent ("Agent").
RECITALS
A. The Borrowers, the Agent and the Lender are party to that certain
Amended and Restated Loan and Security Agreement dated as of September 10, 1996
(as previously amended, the "Credit Agreement"). Unless otherwise specified
herein, capitalized terms used in this Amendment shall have the meanings
ascribed to them by the Credit Agreement.
B. Immediately prior to the execution of this Amendment, the Agent and
the Lender entered into Assignment and Acceptance Agreements dated the date
hereof (the "Assignment Agreements") with each of Heller Financial, Inc., Green
Tree Financial Servicing Corporation and Star Bank, N.A (collectively, the
"Former Lenders"), pursuant to which the Lender purchased from such Persons all
of their outstanding Loans and commitments under the Credit Agreement (the
"Buyout"), and paid them (on behalf of and with the consent of the Borrowers) a
prepayment fee for agreeing to the Buyout, plus any and all unpaid accrued
interest and fees owed by the Borrowers through the date hereof or the Effective
Date, whichever is later, all amounts as set forth in each Exhibit A to the
Assignment Agreements.
C. The Borrowers intend to implement a corporate restructuring,
effective as of January 1, 1997, as set forth in Exhibit A hereto.
D. The Borrowers, the Lender and the Agent wish to amend the Credit
Agreement and waive certain provisions thereof with respect to (a) the corporate
restructuring, (b) the maturity date of the Loans and (c) the rate of interest
on the Loans, all pursuant to the terms as set forth below.
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Now, therefore, in consideration of the mutual execution hereof and
other good and valuable consideration, the parties hereto agree as follows:
1. Amendment to Credit Agreement. Upon the "Effective Date" (as defined
below), the Credit Agreement shall be amended as follows:
(a) The following definitions in Section 1.1 are amended in their
entirety to read as follows:
o "'Stated Termination Date' means September 30, 1997."
o "'Applicable Revolver Base Rate Margin' shall mean one half of one
percent (0.50%)."
o "'Applicable Revolver LIBOR Margin' shall mean two percent (2%)."
o "'Applicable Term Base Rate Margin' shall mean three-quarters of
one percent (0.75%)."
o "'Applicable Term LIBOR Margin' shall mean two and one-quarter
percent (2.25%)."
o "'Default Rate' means a fluctuating per annum interest rate at all times
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equal to the sum of (a) the Interest Rate for each Loan or Obligation
which would be derived by applying the otherwise Applicable
Margin, plus (b) two percent (2.0%). Each Default Rate shall be
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adjusted simultaneously with any change in the applicable Interest
Rate. In addition, with respect to Letters of Credit, the Default Rate
shall mean an increase in the Letter of Credit Fee by two percent
(2.0%) per annum."
(b) The second sentence of Section 2.2(c) is amended in its entirety to
read as follows:
"The Term Loan Notes delivered to the Agent (on
behalf of the Lenders) shall be dated the Closing Date and the
principal amount of the Term Loan shall mature in thirteen
(13) monthly installments. Each of the first twelve (12)
installments of principal shall be payable in an amount equal
to $133,334 (and paid ratably by the Borrowers receiving Term
Loans) and shall be payable on the first day of each month,
commencing on October 1, 1996 and ending on September 1, 1997,
and the final installment of principal on the Term Loan shall
be payable in an amount equal to $6,399,992 or, if
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different, the then remaining principal balance of the Term Loan, and shall be
payable on the Stated Termination Date."
(c) Thefirst paragraph of Section 3.1(a)(iii) is amended in its entirety to
read as follows:
"(iii) Without limiting any other restrictions herein on the
availability of LIBOR Rate Loans, the Borrowers shall not have
the option to elect, designate, continue or convert any Loans
into LIBOR Rate Loans on the Closing Date (through October 31,
1996) or at any time when a Default or an Event of Default has
occurred and is continuing." (d) Section 3.1(b) is amended in its
entirety to read as follows:
"(b). Intentionally Omitted."
(e) Section 3.2(c) is amended in its entirety to
read as follows:
"(c) If upon the expiration of any Interest
Period applicable to LIBOR Rate Loans, MKR
has failed to select timely a new Interest
Period to be applicable to LIBOR Rate Loans
or if any Default or Event of Default then
exists, then the applicable Borrower shall
be deemed to have elected to convert such
LIBOR Rate Loans into Base Rate Loans
effective as of the expiration date of such
Interest Period."
(f) Section 4.2 is amended in its entirety to
read as follows:
"4.2 Termination of Facility; Prepayments.
The Borrowers may terminate this Agreement
upon at least ten (10) Business Days' prior
written notice from MKR to the Agent and the
Lenders, upon (a) the payment in full in
cash of all outstanding Loans, together with
accrued interest thereon, and the
cancellation of all outstanding Letters of
Credit, (b) the payment in full in cash of
all other Obligations together with accrued
interest thereon, and (c) with respect to
any LIBOR Rate Loans prepaid in connection
with such termination prior to the
expiration date of the Interest Period
applicable thereto, the payment of the
amounts described in Section 5.4."
(g) Schedules 8.5 and 8.7 are deleted and
Schedules 8.5 and 8.7 attached hereto are
hereby substituted in their entirety
therefor.
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(h) The Lender's signature page to the Credit
Agreement is amended and substituted in its
entirety by the form of signature page
signed by the Lender and attached to this
Amendment.
2. Consent and Waiver.
(a) Notwithstanding anything to the contrary set
forth in Section 9.21 of the Credit Agreement, the Agent and Lender
consent to MKR creating the following new wholly-owned subsidiaries as
of January 1, 1997:
(i) MotivePower Investments Ltd., a Delaware corporation;
(ii) MotivePower Investments, Inc., a Delaware corporation;
(iii) Boise Locomotive Company, a Delaware corporation; and
(iv) Motive Power Foreign Sales Corporation, a Barbados
corporation;
provided, however, that the consent in this paragraph (a) is
conditioned on the Borrower's acknowledgment and agreement that each of
these subsidiaries shall not (i) conduct business or business
operations, (ii) start operations without the written consent of the
Agent and (iii) have assets or liabilities of any kind in excess of
$10,000 in the aggregate.
(b) Notwithstanding anything to the contrary set
forth in Section 9.9 of the Credit Agreement, the Agent and the Lender consent
to (a) the merger of MotivePower Industries, Inc. into MKR to be effective as of
January 1, 1997 and (b) the dissolution of Sign and AMS Manufacturing Company
(f/k/a Alert Mfg. & Supply Co.) to be effective as of January 1, 1997.
(c) Notwithstanding anything to the contrary set
forth in Section 7.3(j) of the Credit Agreement, the Agent and the Lender
consent to the Borrowers name changes as set forth in Exhibit A hereto.
(d) No later than January 6, 1997, the Borrowers
shall provide to the Agent and the Lender written evidence in form and substance
acceptable to the Agent and the Lender of the effectiveness of (i) the Merger of
MotivePower Industries, Inc. into MKR, (ii) the dissolution of Sign and AMS
Manufacturing Company (f/k/a Alert Mfg. & Supply Co.), and (iii) the name
changes as set forth in Exhibit A hereto.
3. Representations and Warranties of the Borrower.
Each of the Borrowers represents and warrants that:
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(a) The execution, delivery and performance by the
Borrowers of this Amendment have been duly authorized by all necessary
corporate action and that this Amendment is a legal, valid and binding
obligation of the Borrowers enforceable against the Borrowers in
accordance with its terms, except as the enforcement thereof may be
subject to (i) the effect of any applicable bankruptcy, insolvency,
reorganization, moratorium or similar law affecting creditors' rights
generally and (ii) general principles of equity (regardless of whether
such enforcement is sought in a proceeding in equity or at law);
(b) Each of the representations and warranties
contained in the Credit Agreement is true and correct in all material
respects on and as of the date hereof as if made on the date hereof;
(c) The execution, delivery and performance by the
Borrowers of this Amendment, and the performance by the Borrowers of
the Credit Agreement (as amended hereby) do not and will not (i)
violate any provision of any law, rule or regulation applicable to the
Borrowers, the Certificate or Articles of Incorporation or Bylaws of
the Borrowers or any order, judgment or decree of any court or other
agency or government binding on any Borrower, (ii) conflict with,
result in a breach of or constitute (with due notice or lapse of time
or both) a default under any contract, agreement, mortgage or
obligation of any Borrower except where the Borrowers shall have
obtained waivers or consents from the other parties to such agreements
and disclosed the same to the Agent, (iii) result in or require the
creation or imposition of any lien upon any of the Borrowers'
properties or assets (other than Liens permitted under Section 9.19 of
the Credit Agreement) or (iv) require any approval of stockholders or
any approval or consent of any Person under any contract, agreement,
mortgage or obligation to which any Borrower is a party (or by which
its assets or properties are bound) except for the approvals or
consents which will be obtained on or before the date hereof and
disclosed in writing to the Agent.
(d) After giving effect to this Amendment, no Default
or Event of Default has occurred and is continuing.
(e) The Borrowers authorize and agree that on the
Effective Date (i) MKR will be deemed to have made a Revolving Loan
borrowing (and to have provided the funds to the Agent for the use set
forth below) in an aggregate amount equal to the prepayment fee as set
forth on each Exhibit A to the Assignment Agreements of approximately
$1,000,000 in the aggregate (the "Prepayment Fee"), plus any and all
unpaid accrued interest and fees owed by the Borrowers to the Former
Lenders through the date hereof or the Effective Date, whichever is
later as set forth on each Exhibit A to the Assignment Agreements (the
"Payoff Amount"),and (ii) the Agent will use the proceeds of such
Revolving Loan borrowing on behalf of the Borrowers to pay to the
Former Lenders the Prepayment Fee, plus the Payoff Amount as
consideration for consenting to the Buyout.
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4. Effective Time. Sections 1 and 2 of this Amendment shall
become effective - upon:
(a) the execution and delivery hereof by the
Borrowers, the Lender and the Agent;
(b) the payment by the Borrowers to BankAmerica
Business Credit, Inc., individually, on the date hereof of a prepayment
fee of $500,000 in immediately available funds, which fee shall be
deemed fully earned and non-refundable on the date hereof, and MKR
hereby authorizes such payment to be made as a revolving loan advance
to MKR;
(c) the delivery of a legal opinion from Doepken
Keevican & Weiss, counsel to the Borrowers, as to all the transactions
described herein;
(d) receipt by the Agent of evidence of the corporate
restructuring and the other documents and deliveries as set forth in
the Closing Memorandum attached hereto as Exhibit B all in form and
substance acceptable to the Agent; and
(e) the execution and delivery of that certain
Commitment Letter and Fee Letter among MKR, Bank of America Illinois,
Bank of America NT & SA and BA Securities, Inc.
In the event the Effective Time has not occurred on or before 5:00 p.m. (Chicago
time) December 31, 1996, Sections 1 and 2 hereof shall not become operative and
shall be of no force or effect.
5. Reference to and Effect Upon the Credit Agreement.
(a) Except as specifically amended above, the Credit
Agreement and the other Loan Documents shall remain in full force and
effect and are hereby ratified and confirmed.
(b) The execution, delivery and effectiveness of this
Amendment shall not operate as a waiver of any right, power or remedy
of the Agent or any Lender under the Credit Agreement or any Loan
Document, nor constitute a waiver of any provision of the Credit
Agreement or any Loan Document, except as specifically set forth
herein. Upon the effectiveness of this Amendment, each reference in the
Credit Agreement to "this Agreement", "hereunder", "hereof", "herein"
or words of similar import shall mean and be a reference to the Credit
Agreement as amended hereby.
6. Costs and Expenses.
(a) The Borrower hereby affirms its obligation under
Section 15.7 of the Credit Agreement to reimburse the Agent and the
Lender for all reasonable costs, internal
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charges and out-of-pocket expenses paid or incurred by the Agent in
connection with the preparation, negotiation, execution and delivery of
this Amendment, including but not limited to the attorneys' fees and
time charges of attorneys (and the allocated cost of in-house counsel)
for the Agent with respect thereto.
7. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (AS OPPOSED TO CONFLICTS OF LAWS
PROVISIONS) OF THE STATE OF ILLINOIS; PROVIDED THAT THE LENDERS AND THE AGENT
SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.
8. Headings. Section headings in this Amendment are included
herein for convenience of reference only and shall not constitute a part of this
Amendment for any other purposes.
9. Counterparts. This Amendment may be executed in any number
of counterparts, each of which when so executed shall be deemed an original but
all such counterparts shall constitute one and the same instrument.
10. JURY TRIAL WAIVER. THE BORROWERS, THE AGENT AND THE
LENDERS HEREBY WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO
ENFORCE OR DEFEND AND RIGHTS UNDER THIS AMENDMENT, THE LOAN DOCUMENTS OR UNDER
ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE
FUTURE BE DELIVERED IN CONNECTION HEREWITH OR ARISING FROM ANY LENDING
RELATIONSHIP EXISTING IN CONNECTION WITH THIS AMENDMENT OR ANY LOAN DOCUMENT,
AND AGREE THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND
NOT BEFORE A JURY.
11. Releases. In further consideration of the execution of
this Amendment by the Agent and the Lenders, the Borrowers hereby release the
Agent and the Lenders and all current and future holders of assignments of or
participations in the Obligations and their respective affiliates, officers,
employees, directors, agents and attorneys (collectively, the "Releasees") from
any and all claims, demands, liabilities, responsibilities, disputes, causes of
action (whether at law or in equity) and obligations of every nature whatsoever,
whether liquidated or unliquidated, known or unknown, matured or unmatured,
fixed or contingent (collectively, "Claims") that the Borrowers may have against
the Releasees which arise from or relate to any actions which the Releasees may
have taken or omitted to take on or prior to the date hereof with respect to the
Obligations, any Collateral, the Credit Agreement, any other Loan Document and
any third parties liable in whole or in part for the Obligations. For purposes
of the release contained in this paragraph, the term "Borrowers" shall mean and
include the Borrowers and their successors and assigns, including, without
limitation, any trustees acting on behalf of such parties and any
debtor-in-possession in respect of any such party.
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12. Reaffirmation of Guaranty. Each of the Borrowers as a
guarantor under Article 16 of the Credit Agreement hereby (i) acknowledges and
reaffirms all of its obligations and undertakings under the guaranty under
Article 16 of the Credit Agreement, and (ii) acknowledges and agrees that
subsequent to, and taking into account this Amendment, the guaranty under
Article 16 of the Credit Agreement is and shall remain in full force and effect
in accordance with the terms thereof.
13. Date Down on Title Insurance. If on March 31, 1997 the
Lender still has any outstanding Commitment under the Credit Agreement, the
Borrowers shall deliver to the Agent and the Lender date down endorsements for
the title policies with respect to the Mortgages in form and substance
acceptable to the Agent.
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IN WITNESS WHEREOF, the parties have executed this Amendment
as of the date and year first above written.
"BORROWERS"
Power Parts Company MK Rail Corporation
By: By:
Title: Title:
Touchstone, Inc. Motor Coils Manufacturing Co.
By: By:
Title: Title:
Power Parts Sign Co. MK Engine Systems Company, Inc.
By: By:
Title: Title:
Clark Industries, Inc.
By:
Title:
Acknowledged and agreed to:
AMS Manufacturing Company
(f/k/a Alert Mfg & Supply Co.)
By:
Title:
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Commitment: $75,000,000 BANKAMERICA BUSINESS CREDIT, INC.,
individually as a Lender and as Agent
Revolving Loan
Commitment: $67,000,000
By:
Term Loan
Commitment: $8,000,000 Its:
Pro Rate Share: 100%
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EXHIBIT A
Corporate Restructuring
Existing Name New Name as of January 1, 1997
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EXHIBIT B
Closing Memorandum
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